There is clear consensus that people want better conditions for themselves and their communities comingout of the pandemic than they knew previously. With the many challenges the country faces in the comingdecade, achieving an improved normal will be a steep, uphill battle. To seize this moment of transition,decision-makers both inside and outside of government need to fundamentally shift how we engagepeople, support communities, and develop public policy.

The reality that much of the country wants to leave behind was made possible through the values ofconstant growth, competition, and self-interest. The last 18 months has revealed to us that relationships,equality, and wellbeing are what is essential, and these may be the building blocks toward the rebuild andfuture we aspire to.

Individuals are touched by nonprofits and charities every day, and the government has long relied onorganizations to deliver on federal priorities. But the strength and value of the sector - as a sector - trulybecame visible to the public and government during the pandemic. While most businesses were forced toclose, many tens of thousands of organizations worked beyond their capacity to meet needs. People gaineda sense of what life would be like without performing arts, sports, camps and cultural institutions. We facedour critical need for health and mental health services, quality child and long term care. The preciousimportance of nature conservation, food security, seniors' support and spiritual institutions is now evident.

Everything we know about complex systems change tells us that relationships of mutual influence and trustare required if we are to adapt to challenging circumstances and address problems with efficiency,sustainability and effectiveness. Our policy priorities in this election emphasize the importance ofrelationships: between the government and the sector, between government and communities, andbetween charities and non-charities.

The federal government requires the nonprofit sector now more than ever. And the nonprofit sector, alongwith the communities we work with, needs government to provide the conditions necessary to operate atour full potential.

Election 2021: Imagine Canada's Policy Prioritiesfor the Nonprofit Sector

AUGUST 2021

Set the conditions required to engage strategically with our sector. The creation of a “home” for thenonprofit sector within the machinery of government is a critical first step. Take an equity approach to this recommendation, engaging directly with organizations from equity-deserving communities to understand and address the specific challenges that they are facing.

Prescriptive decision-making on public policy that affects the nonprofit sector and the communities wework with, but is made without the expertise of nonprofit organizations, will continue to lead to problems.At best, these include missed opportunities and government scandal, and at worst, we can expectcommunities that are underserved and federal governance priorities that fail to meet expectations.

For a better future to be realized, we need a home in government -- an entity responsible for maintainingour relationship and ensuring our two sectors work together effectively. A permanent body that has theability to coordinate nonprofit sector policy across departments and jurisdictions, works to maintain oursector’s health and capacity, identifies required data about the sector, and understands its incredibleworkforce and volunteer base would provide a strong foundation for an intentional, working partnership.

Organizations from equity-seeking communities face particular challenges and barriers, including anti-Blackracism, anti-Indigenous racism, Islamophobia and other forms of inequity, and serve communities withunique needs. A one-size-fits-all approach will not be appropriate to deal with a sector as diverse as ours.This context further emphasizes the need for an entity that can engage with the nonprofit sector in anintentional, nuanced and meaningful way.

The lack of an internal advocate within government has meant that currently, and for the past decade,Statistics Canada has no mandate to collect and release even very basic data on our country’s nonprofitsector. The federal government must commit to knowing key information about its critical partner inservice delivery and maintenance of quality of life.

We would like to see that policymakers:

1.

2.

Priority #1: Engage strategically with the nonprofit and charitablesector

Election 2021: Imagine Canada's Policy Prioritiesfor the Nonprofit Sector

AUGUST 2021

Election 2021: Imagine Canada's Policy Prioritiesfor the Nonprofit Sector

Recognize the importance of core funding for sector organizations by shifting from an exclusive policyfocus on short-term project funding. An equity approach to this recommendation would see thatspecific funding gaps faced by organizations from equity-deserving communities be addressed. Ensure that departments and agencies cover the full administrative costs associated with deliveringthe services being funded through federal grants. Build on the Community Service Recovery Fund as a developmental program, and top up the currentiteration by an additional $300 million.

Decades ago, the government provided core funding to many organizations, covering costs such as rent,communications, fundraising, technology, benefits, evaluation, reporting, insurance, software, and training,all of which are essential to delivering quality programs. These were government investments in community- supporting local employment and respecting organizations’ ability to devise local solutions. Over the pastseveral years, core funding opportunities have become replaced by short term project-based funding withspecific predetermined outcomes.

What is more, the funding of these projects often fail to cover the full cost of program delivery. This has ledto what is known as a ‘starvation cycle’, where organizations are reliant on short term funding that doesn’tcover core costs and as a result face a chronic under-investment in key operational areas. The constantpursuit for project funding distracts from purpose and mission attainment, limiting the ability to innovate,improve quality of core programs or invest in staff, long-term initiatives and organizational health. This canseverely hinder an organization’s ability to support its community.

The absence of stable core funding also has an impact on decent work for the sector’s workforce of 2.4million people, the majority of whom are women (77%). Too many of the jobs in the sector are precarious,low-wage, and offer few benefits as a direct result of the way our organizations are funded.

The pandemic severely impacted sources of unrestricted core funding (mainly donations and earnedincome). Unfortunately, a lack of core funding inhibits organizational resilience and the ability to respondand adapt in times of crisis. This has impacted many organizations’ preparedness to withstand pandemicpressures.

There is strong evidence that organizations from equity-deserving communities face particular challenges inaccessing funding. For instance, recent reports examined structural reasons that mean funding for thewomen’s sector is lower than other parts of the nonprofit sector and how Black-led and Black-servingorganizations are dramatically underfunded. The government can start to reverse these trends through theprovision of strategic core funding.

This coming mandate, the government needs to:1.

2.

3.

Priority #2: Unleash our potential through funding reform

AUGUST 2021

Strong working relationships across sectors and networks of actors will support a sustainable rebuild forcommunities. Particularly during periods of crisis, where new needs can emerge, it becomes clear thatcharities do not exist everywhere there is need for services.

Under current rules, charities cannot deliver funds to non-charities unless they enter into an agreementwhereby they exercise “direction and control” over the operations of their non-charity partner, creatinga burdensome and paternalistic barrier to partnerships. With these rules, Canada is unique among othernations. The charitable sector is hindered in its ability to partner and direct funds in support of thecountry’s reconciliation agenda and international development assistance policy.

Many organizations doing critical work in communities are not qualified donees, so “direction andcontrol” requirements make it more difficult for funding to flow to equity-seeking communities.

We recommend that:

The federal government works with the sector to reform the existing rules on qualified donees anddirection and control so that public and charitable funds continue to be protected, but in a way thatallows organizations to respond more effectively to community interests.

Priority #3: Enable equitable partnerships to better servecommunities

Election 2021: Imagine Canada's Policy Prioritiesfor the Nonprofit Sector

AUGUST 2021